Bolzano/Rome – Money doesn’t seem to play a role in football. You only have to look at how much some top European clubs have spent on player purchases in recent years. And now Saudi Arabian clubs are causing a stir by attracting scores of football stars and coaches with exorbitant salaries.
Cristiano Ronaldo showed the way by moving to the Arabian Peninsula in winter, and Neymar, Sadio Manè and Karim Benzema have since followed suit. The resigned Italy team coach Roberto Mancini is said to have received a tempting offer from Saudi Arabia.
Italy’s football clubs – until 15 years ago they were still spoiled for international success and home to many of the world’s best players – can no longer keep up with the sums that many clubs throw around. In the Champions League they are not among the first contenders for the title.
Rather, they struggle to stay afloat financially. Because the economic situation of many clubs is catastrophic. The “Report Calcio 2023” study paints a dramatic picture of Italy’s professional football.
Annual loss of more than a billion
The recently published, more than 200-page study was prepared by the Italian Football Association Figc in cooperation with the research institute Arel and the auditing firm PwC. It impressively shows how the balance sheet figures of the 100 clubs in Series A, B and C are increasingly deteriorating – exacerbated by the consequences of the corona pandemic.
The Italian professional clubs ended the 2021/2022 season with a total loss of 1.36 billion euros. The report shows that sales of 3.43 billion euros were offset by costs of 4.67 billion euros.
Federico Mussi explains that Italian football has worse financial figures than other European leagues.
Before Corona – in the 2018/2019 season – the business loss was “only” 412 million euros. A season later it was already minus 881 million. Yields have declined in recent years due to the long-applied Covid measures, while costs have risen.
Increasingly high (player) salaries are the main reason for the rising costs. These account for an average of 84 percent of sales and thus eat up the majority of revenue.
Debt at a new high
The annual losses drive the Italian professional clubs more and more into debt. In the 2021/2022 season, the total debt was 5.61 billion euros. That was a new high. Before Corona it was less than five billion euros.
PwC’s Federico Mussi writes in the study that the tight financial situation is severely restricting football clubs’ ability to invest. The auditor explains that Italian football has worse financial figures than other European leagues. In addition, Italy’s clubs are more dependent on income from TV rights, have poorer youth development and lower investments in stadiums and sports centers.
The financial difficulties this year had serious consequences for Reggina. The traditional club from Calabria was excluded from Serie B because it did not pay its tax debts. In the spring, Reggina was the (defeated) opponent of FC Südtirol in the quarter-finals of the playoffs. And Pordenone did not participate in Serie C this year for financial reasons. Five years ago, the club from Friuli was promoted to Serie B and a year later even almost made it into Serie A.
Interview
“It needs regulation”
Dietmar Pfeifer, Managing Director of FC Südtirol (Photo: FC Südtirol)
SWZ: The business losses and the debt of the football clubs in the top Italian leagues are constantly increasing. What is wrong with the Italian football system?
Dietmar Pfeifer: The debt in football is not only high in Italy, but everywhere – whether England, France, Spain or Germany. Without large investors to fill the financial gaps, the clubs will find themselves in trouble. While every company draws up a business plan and tries not to spend more than it earns, everything is different in football. There emotions are involved: interference from outside – whether fans, media or overriding interests – drive many clubs into debt. I’m amazed that this continues and that there is no regulation. Ultimately, the championships will be distorted if clubs keep piling up debt until they are bankrupt. That can not be.
A major reason for the financial disaster is the high player salaries. Now the clubs from Saudi Arabia are driving up salaries even further. Will this eventually break the neck of Italian football?
Either all clubs will eventually be in the hands of large investors and member clubs will no longer be competitive – or a stop will be put in place at international level. The starting point of today’s situation are the top clubs that want to be internationally competitive and succeed in the Champions League. They push each other up so far that everyone bleeds out. This system also increases the average salaries of the lower leagues enormously. In Serie B, for example, seven of the 20 clubs are now foreign-owned. Sometimes staggering salaries are paid. In order to prevent that, you have to try – like FC Südtirol is doing – to create your own identity and values on which the club builds.
You mentioned regulation. How should one look like?
First and foremost, the clubs would have to agree to put the players’ agents in their place. Some consultants earn ten to 20 million euros and even more on individual operations. This is a normal advisory activity, like that of a real estate agent, but is remunerated at a small percentage of the total amount of the operation. It doesn’t matter in football. If a player’s agent demands 20 million euros, clubs are willing to pay it. Even after 17 years in football I can’t understand why top clubs don’t decide not to pay more than a few percent. If a player’s agent takes the knife, the 15 biggest clubs in the world could agree not to take any more players from that agent. Then the price gouging would stop. In addition, a maximum salary would have to be introduced for each league – i.e. an upper limit for all first and all second leagues. In order for this to be adhered to, strict controls of the balance sheets would be needed.
Is it realistic that something like this will be implemented?
It would be feasible, but it is probably wishful thinking because there is no will. Because the football world is about such large sums of money that those who are at the top and financially control the scene have no interest whatsoever in introducing limits. On the other hand, I wonder where it will lead if the clubs accumulate more debt every year. Some clubs have more than a billion euros in debt.
How healthy and fit for the future is FC Südtirol?
FC Südtirol has made it a principle that only those funds may be spent that can also be generated on the market. So about sponsoring, ticketing, player sales, TV money and merchandising. No more euros. With this system, we naturally have one of the lowest budgets in the B series. On the other hand, FC Südtirol is financially stable and debt-free. I also see it as a great responsibility that FC Südtirol does not get into trouble. As a responsibility towards our territory, our fans, the supporting institutions and the clubs with which we work closely. Hence the philosophy: if a euro comes in, we can spend a euro – no more.
Would the Series A be financially feasible with this model?
In Serie A, the TV money is five times higher than in Serie B. In addition, we would be even more appetizing for national and international sponsors. And revenue from ticketing and merchandise would increase. Of course, we would still be at the bottom in terms of budget. But with serious work and the right use of the few financial resources, you can still be competitive. In addition, FC Südtirol has initiated increased investment in the youth sector in order to develop players who are competitive in the league. With this advance investment, some players do not have to be searched for and bought expensively according to the market rules. That’s one of the strategies for clubs that don’t have big investors behind them.
Interview: Heinrich Schwarz
Issue 32-23, page 15
2023-08-25 00:35:36
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